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How Credit Bureaus Impact Car Loans In Mississauga

How Credit Bureaus Impact Car Loans In Mississauga

Whether you’re planning to apply for a car loan or are just going about your business, credit bureaus have a significant influence over your financial wellbeing.

 

Yet most of us don’t actually know that much about them. We may know their name and that they collect information on financial dealings but that’s usually it for most of us.

 

There are also five key things everyone needs to know about the credit bureaus:

 

1.   There are multiple credit bureaus

 

There are two in Canada and more throughout the globe.

 

The two bureaus you need to know are Equifax Canada and TransUnion Canada. They collate information on your financial life from across the financial world. That includes your bank, your car loan company, cell phone provider, utility provider, car insurance company and anyone with whom you have financial dealings.

 

2.   There’s more than one credit score

 

You don’t just have a single credit score. Both credit bureaus have their own score that uses their own formula. While they may be similar, they won’t be the same.

 

Both Equifax and TransUnion calculate your score in different ways and different influences are weighed differently. A score regarded as good with one won’t necessarily be good with another.

 

Fortunately, both bureaus use a scale system. As long as you’re as close to the top of the scale as possible, it doesn’t really matter what the numbers are.

 

3.   Credit scores are all about risk

 

Credit bureaus are in the risk business. The information they collect is designed to let potential lenders assess how much of a risk you would be if they provided a car loan or other lending.

 

It’s an inexact science but it’s the system we have. The higher your credit score, the lower your perceived risk. The lower your risk, the more likely you are to be accepted for a loan and the better the rate you’ll be offered.

 

4.   Your credit report says a lot about you

 

If credit bureaus collate data from gas, electric, phone, internet, car insurance, medical insurance, mortgages and so on, they get to know a lot about you.

 

The bureaus will also collect publicly available information on you such as bankruptcy orders, consumer agreements and other information on public record.

 

5.   Not every credit check will impact your credit score

 

Out of all the five things you may not know about credit bureaus, this is probably the most relevant. Not all credit checks will impact your credit score.

 

There are two types of check a soft inquiry and a hard inquiry. Soft inquiries don’t leave a mark on your credit report and will not impact your score. These happen with car loan pre-approval, car insurance credit checks and most employer credit checks.

 

When you actually apply for a car loan, that uses a hard inquiry. Hard inquiries do leave a mark on your credit report. Too many of these in a short time can impact your score as it looks as though you’re applying for a lot of credit at once.

 

There is a lot of work that goes on to provide a credit score. When you’re ready to use that score to access a competitive car loan, we can help!

 

We will use all our skill and experience to deliver the lowest possible car loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

 

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